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HK govt to launch public consultation on excessive FDH borrowings

29 May 2025

Some employers or former employers are harassed when their FDWs fail to repay loans

The Hong Kong government is set to launch a public consultation this month on how to further regulate unsecured personal loans to address the issue of excessive borrowing of foreign domestic workers.

This was announced by the Acting Secretary for Financial Services and the Treasury, Joseph Chan, during the question and answer session at the Legislative Council yesterday, May 28.

Chan was responding to questions raised by legislator Judy Chan on reports that employers or former employers of FDWs were harassed by money lenders or collectors after the FDW borrowers defaulted on their payment.

PINDUTIN PARA SA DETALYE

Judy Chan asked for statistics on such cases, and reminded the Financial Services official of the government’s pronouncement last November that it would hold a public consultation and education on excessive FDW borrowings in the first half of the current year.

Paul Chan said that in 2024 there were 11 reports of employers being harassed by debt collectors while there have been six such cases so far this year. All the cases were forwarded to the police for further investigation and appropriate action.

“The Government is very concerned about the borrowing issue of foreign domestic helpers (FDHs) and will strictly regulate licensed money lenders and step up publicity and education etc, to better protect the interests of FDHs and their employers,” he said.

Pindutin para sa detalye

Paul Chan said that the public consultation on excessive borrowing will not only tighten rules on unsecured personal loans, it will also strengthen protection for loan referees and people like employers who played no role in their helper’s borrowing.

After the public consultation, the views submitted will be collated and summarized, and the Legislative Panel on Financial Affairs will be consulted when finalizing the relevant measures and in formulating legislative proposals.

Paul Chan said that the law is clear that money lenders and their debt collectors can only recover debts from the person who undertook the loan.

Basahin ang detalye!

“A money lender and his debt collector shall not, while trying to locate the whereabouts of debtors, harass anyone, adopt unlawful or improper debt collection practices. Therefore, if a FDH employer or former employer discovers that his/her residential address is used improperly and feels harassed, he/she may lodge a complaint with the money lender concerned and request immediate cessation of his improper debt collection behaviours,” said Paul Chan.

He added that any breach of the licensing conditions for money lenders could incur a maximum fine of $100,000 and imprisonment for two years.

A complaint that a money lender had harassed a FDW employer or former employer could serve as a ground for the Registrar of Money Lenders or the police to revoke its licence.

   

 

 

As part of the continuing effort to find a solution to the problem, Paul Chan reminded the legislators that in May last year, employment agencies were told to inform the Labour Department whether they are associated with any financial institution when applying or renewing a licence.

 

Since then and until the end of April this year, LD reportedly received and processed declarations from 3,362 EAs and among them, 41 declared affiliations with financial institutions.

 

Paul Chan said the government continues to closely monitor the money lending sector and has taken various steps to further regulate their activities.

 

In 2021, money lenders were required to assess the borrower’s repayment ability and take this into consideration when extending loans. In addition, money lenders were obliged to immediately cease using a referee’s information once they become aware that the written consent was in fact not signed by the referee.

 

In 2022, the government lowered the statutory interest cap rate from 60 to 48 percent and the threshold of extortionate rate from 48 to 36 percent.

 

  

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